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The Effect of Horizontal Spillovers from FDI on Average Wages: Evidence from Vietnamese Enterprises

Author

Listed:
  • Phuong Van Nguyen

    (Center for Public Administration, International University, Vietnam National University — HCMC, Vietnam)

  • Hien Huynh Thi Ngoc

    (International University, Vietnam National University Ho Chi Minh city, Vietnam)

  • Hoa Doan Xuan Trieu

    (The School of Business, International University, Vietnam National University — HCMC, Vietnam)

  • Khoa Tien Tran

    (Center for Public Administration, International University, Vietnam National University — HCMC, Vietnam)

  • Dung Hanh Phuong Nguyen

    (The School of Business, International University, Vietnam National University — HCMC, Vietnam)

Abstract

This study aims to find fresh evidences of the effects of horizontal spillover, trade orientation, and firm characteristics on real wages moderated by five categories of ownership. Based on an exploration of 2007–2015 Vietnamese firm-level data collected by the General Statistics Office of Vietnam, the findings reveal significantly positive effects of horizontal spillover and export orientation on average wages. In contrast, import orientation negatively affects wages. The results are supported by the literature of labor market competition and productivity improvement. Importantly, the effect of horizontal spillovers from FDI and trade on average wage varies significantly across ownership types. Although horizontal spillover and the gender ratio have no overall influence on average wages, they do have negative effects on wages in Vietnamese domestic private. Besides, the firm characteristics such as firms’ real output, capital intensity, market share, and net income are also important predictors for the rise of the firm-level average wage in Vietnam.

Suggested Citation

  • Phuong Van Nguyen & Hien Huynh Thi Ngoc & Hoa Doan Xuan Trieu & Khoa Tien Tran & Dung Hanh Phuong Nguyen, 2020. "The Effect of Horizontal Spillovers from FDI on Average Wages: Evidence from Vietnamese Enterprises," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 23(02), pages 1-28, June.
    • Handle: RePEc:wsi:rpbfmp:v:23:y:2020:i:02:n:s0219091520500101
    DOI: 10.1142/S0219091520500101
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